By Licda. Yannsi Paniagua – Labor Department, GLC Legal
On October 27, 2025, the National Wage Council (CNS) approved, by majority vote, a 1.63% general increase in all minimum wages for Costa Rica’s private sector, which will take effect on January 1, 2026.
This adjustment, which is mandatory, applies both to full-time and piece-rate workers, reaffirming the country’s commitment to the periodic review of minimum wages under its tripartite dialogue model.
1. New Approved Adjustments
In addition to the 1.63% general increase, the CNS approved differentiated raises for certain specific occupational categories, as follows:
- Domestic work: +3.96%
- Generic specialized occupation: +2.18%
- Technical degree in diversified education: +2.50%
Accordingly, on a full-time monthly basis, these adjustments represent:
- ₡5,983.87 for unskilled workers
- ₡6,732.29 for skilled workers
- ₡10,650.86 for university graduates
For all cases involving differentiated adjustments, the increases exceed ₡10,000.
2. Rationale Behind the Adjustment
The Minister of Labor and Social Security, Andrés Romero, emphasized that the applied formula “has produced satisfactory results in maintaining the purchasing power of wages while recognizing workers’ contribution to national production growth.”
The methodology used by the CNS — agreed upon by the three represented sectors (Government, Employers, and Workers) — combines two key components:
• Cost of living (inflation): According to data from the Central Bank, this indicator has decreased in recent months.• Per capita GDP growth: With lower inflationary pressure, the formula assigns greater weight to national productivity.
This technical calculation led to the 1.63% adjustment as a balanced percentage between protecting purchasing power and ensuring business sustainability.
3. Practical Implications for Employers
While the increase may seem modest, its compliance and planning impact is significant. Companies should consider the following key points:
a) Mandatory salary updates
Starting January 1, 2026, no worker may receive less than the new minimum wage corresponding to their occupational category. This applies to both full-time and part-time positions, as well as piece-rate contracts.
b) Adjustments to payrolls, contracts, and internal policies
Human Resources and Accounting departments must update payroll systems, pay slips, compensation policies, and employment contracts to reflect the new minimums. Doing so ensures traceability and compliance in the event of MTSS (Ministry of Labor) inspections.
c) Budget planning and cost forecasting
The adjustment must be included in operational budgets for 2026. Even a low percentage, when applied across an entire payroll, generates a cumulative impact—particularly in businesses with high turnover or wage scales tied to minimum wage benchmarks.
d) Strategic internal communication
Clear and transparent communication of the change helps strengthen employee trust, reinforce perceptions of fairness, and uphold a culture of compliance.
4. Perspective and Reflection
The 1.63% increase is the lowest approved in recent years, reflecting an economy with controlled inflation and moderate growth. While it safeguards purchasing power without creating additional inflationary pressure, it also reignites the discussion on productivity and the added value of human talent.
For employers, this context presents an opportunity to:
- Review overall salary structures, beyond just the legal minimums.
- Analyze internal equity and market competitiveness.
- Reinforce complementary benefits such as flexibility, well-being, and professional development.
Compliance is only the starting point; strategic compensation management is what distinguishes companies that attract and retain top talent.
5. Final Thoughts
Beyond the percentage itself, this adjustment reaffirms the stability of Costa Rica’s social dialogue model, where wage decisions seek a balance between social justice and business sustainability.
For companies, timely compliance not only prevents sanctions but also conveys a responsible, ethical, and competitive image to employees, clients, and authorities alike.
At GLC Legal, we support organizations in implementing salary adjustments in accordance with the new decree, updating contracts and internal policies, and harmonizing compensation structures across the region.
Our approach combines regulatory compliance with a strategic business vision.
Contact us to receive a comprehensive review of your salary structure and your 2026 compliance plan.
